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Regular Session, 2014
SENATE BILL NO. 283
BY SENATORS BROWN AND GUILLORY
RETIREMENT BENEFITS. Creates a portable retirement savings plan for private sector
employees. (7/1/14)
AN ACT1
To create the Louisiana Retirement Savings Plan; to provide legislative findings; to specify2
the purpose of the Plan; to establish a board of trustees; to provide for employer and3
employee rights and responsibilities under the Plan; to provide for provider selection;4
to provide for timing, amount, and methods of benefit payment; to provide for an5
effective date; and to provide for related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. The Legislature of Louisiana finds that retirement security is of great8
importance to individuals and to society as a whole. While social security provides some9
income replacement for the elderly, the disabled, and survivors, it is considered only one leg10
of a three-legged stool. If the social security payments are not supported by personal savings11
and some other source of monthly payments, the annuitant risks a reduced standard of living,12
possibly falling into poverty, and becoming reliant on aid from other people or government13
services. Personal savings rates are down. Even for those with some savings, it is difficult14
to accumulate sufficient wealth to assure a steady stream of livable income. Due to15
investment risk and fee schedules for individual investors, the net savings in specialized16
retirement accounts does not increase at a rate comparable to pooled investments managed17 SB NO. 283
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by experts. Additionally, the current wealth accumulation instruments available to private-1
sector employees, while providing for "roll-overs" or trustee-to-trustee transfers, are not2
seamlessly portable from one employer to another. 3
Section 2.(A) The Louisiana Retirement Savings Plan ("Plan") is established as a4
private entity, charged with overseeing the investment of the pool of assets accumulated5
through the contributions provided for in this Act. The purpose of the Plan is to provide6
retirement and death benefits to the participants while affording the maximum portability7
of these benefits for the participants. 8
(B) All assets, proceeds, or income of the Plan, and all contributions and payments9
made to the Plan to provide for retirement and related benefits shall be held, invested as10
authorized by law, or disbursed as in trust, for the exclusive purpose of providing such11
benefits, withdrawals, and administrative expenses and shall not be encumbered for or12
diverted to any other purpose. 13
Section 3.(A) There is hereby established the Louisiana Retirement Savings Plan14
Board of Trustees ("Board") to manage the funds of the Plan. The Board shall have five15
members, as follows:16
(1) One member appointed by the governor from a list of six nominees submitted17
by the Louisiana Association of Business and Industry.18
(2) One member appointed by the governor from a list of six nominees submitted19
by the AFL-CIO.20
(3) One member appointed by the speaker of the House of Representatives and one21
member appointed by the president of the Senate from a list of six names submitted by the22
Louisiana Association of Chamber of Commerce Executives.23
(4) The treasurer, ex officio, or his designee.24
(B) On or before September 2, 2014, each nominating entity shall submit the initial25
list of nominees to the appointing authority. On or before October 1, 2014, the appointing26
authority shall notify the treasurer of the appointment. On or before November 3, 2014, the27
treasurer shall convene the initial meeting of the Board. The term of office of the initial28
board members shall expire concurrent with the expiration of the current governor's term.29 SB NO. 283
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(C) Beginning in 2016 and every four years thereafter, each nominating entity shall1
submit a list of nominees to the appointing authority by the fifteenth day of January. The2
appointing authority shall notify the treasurer of the appointment by the thirtieth day of3
January. The treasurer shall convene the first meeting of the Board for that term on or before4
the third Monday in February.5
(D) The Board shall elect annually from its membership a chairman and such other6
officers as the Board deems necessary and appropriate.7
(E) Within sixty days of a vacancy on the Board, the nominating entity shall submit8
a list of six nominees for the position to the appropriate appointing authority. The9
appointing authority shall notify the chairman of the Board of the appointment within10
seventy-five days of the vacancy.11
(F) Each member of the Board, and the Board acting collectively on behalf of the12
Plan, shall act with the care, skill, prudence, and diligence under the circumstances13
prevailing that a prudent institutional investor acting in a like capacity and familiar with such14
matters would use in the conduct of an enterprise of a like character and with like aims. 15
Section 4.(A) The Board shall select no fewer than three companies to manage the16
pool of Plan assets attributable to the Plan participants selecting that provider. In setting the17
criteria for this selection, the Board shall consider, among other things, the following: 18
(1) The ability of the company to reduce individual risk and fees through the pooled19
asset management approach the company proposes to provide to Plan participants.20
(2) The nature and extent of the rights and benefits to be provided for participating21
employees and their beneficiaries.22
(3) The relation of the rights and benefits to the amount of the contributions to be23
made pursuant to the provisions of this Act.24
(4) The suitability of the rights and benefits to the needs and interests of25
participating employees and their employers.26
(5) The ability of the designated company or companies to provide the rights and27
benefits under this Act.28
(B) The Board shall require the providers to manage the Plan assets with the29 SB NO. 283
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objective of providing each participant with a cost-effective stream of income in retirement1
and reducing benefit level volatility, particularly for those approaching retirement.2
Section 5.(A) Except as provided in Subsection F of this Section, each private3
employer operating within the state of Louisiana that does not offer any other type of4
employer-sponsored retirement savings plan shall inform all employees of the provisions of5
this Act within thirty days after the effective date. Thereafter, each employer to which this6
Section applies shall inform each new employee of the provisions of this Act within thirty7
days of the hire date.8
(B) Within a reasonable period of time before the first day of December before the9
beginning of each calendar year, the employer shall notify each employee eligible to10
participate in the Plan of each of the following:11
(1) The payments that may be elected or treated as elected under the Plan.12
(2) The opportunity to make the election to terminate participation in the Plan.13
(3) The opportunity to make the election under the Plan to have contributions made14
at a different percentage or in a different amount.15
(4) The opportunity under the Plan to modify the manner in which such amounts are16
invested for the upcoming calendar year.17
(C) Each participating employer shall designate a provider for its employees. In the18
absence of an affirmative selection of a provider by the employee, contributions on behalf19
of the employee shall be made to the provider designated by the employer.20
(D) An employer shall not be a fiduciary with respect to the selection, management,21
or administration of the Plan solely because such employer makes the Plan available;22
however, employers shall be responsible for meeting the enrollment requirements and23
transmitting contributions, as required under this Act.24
(E) An employer that fails to comply with the provisions of this Act shall be subject25
to penalties.26
(F) The provisions of this Act shall not mandate action by any church, any employer27
that has been in existence for fewer than nine months, or any employer with fewer than five28
employees; however, such an employer may voluntarily comply with the provisions of this29 SB NO. 283
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Act in order to provide the benefits to its employees.1
Section 6.(A)(1) An employee is deemed to have elected to participate in the Plan2
unless he opts out on a form provided by the Board and transmitted to the Board by his3
employer. An employee's election not to participate in the Plan shall expire after two years.4
After such two-year period and absent a new election, the employee shall be treated as5
having made the election to participate with the minimum contribution to the employer's6
designated provider.7
(2) An employee who elects to participate in the Plan, or who is deemed to have8
elected to participate, shall have a minimum of three percent of his gross wages withheld by9
his employer each pay period. 10
(3) Employers may, in addition to contributions an employee elects or is treated as11
having elected to have made, make a contribution of up to five thousand dollars per year to12
the Plan on behalf of each employee eligible to participate in the Plan, provided such13
contributions are made in a uniform manner and are not intended to benefit solely highly14
compensated employees.15
(4) The employer shall forward no less than monthly to the Board, and the Board to16
the selected provider, all employee contributions together with any funds the employer17
chooses to contribute on the employee's behalf. The payments shall be made on or before18
the last day of the month following the month in which the compensation otherwise would19
have been payable to the employee.20
(5) The Board may promulgate rules to ensure the contribution limitations do not21
conflict with federal law.22
(B) The employee contributions shall not be subject to taxation by the state of23
Louisiana.24
(C) An employee may elect to terminate participation in the Plan at any time, subject25
to a requirement for reasonable notice as established by the Board.26
(D) A Plan participant may at any time withdraw his funds from his provider by27
terminating participation in the Plan as provided in Subsection C of this Section and subject28
to reasonable notice as established in the provider's agreement with the participant. The29 SB NO. 283
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withdrawal shall be subject to any applicable fees, penalties, and taxes.1
Section 7.(A) A provider shall pay benefits in accordance with one of the following:2
(1) In the case of a participant who does not die before the annuity starting date, the3
benefit payable to such participant shall be provided in the form of a qualified joint and4
survivor annuity as defined in Section 205(d)(1) of the Employee Retirement Income5
Security Act of 1974 (29 U.S.C. 1055(d)(1)).6
(2) In the case of a participant who dies before the annuity starting date and who has7
a surviving spouse, a qualified preretirement survivor annuity as defined in Section8
205(d)(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1055(d)(2))9
shall be provided to the surviving spouse of such participant.10
(B) A participant may elect the time to start receiving benefit payments from the11
Plan, except that a participant may not elect to receive benefit payments before reaching the12
age of sixty and must begin receiving benefit payments before the age of seventy-two.13
Section 8. When the federal government provides for a tax-qualified plan structure14
that, if applied to the Plan, would allow the participants' contributions to be exempt from15
federal taxation, the Board shall take any action necessary to secure tax-qualified status for16
the Plan, including proposing amendments to this Act.17
Section 9. The Board is hereby authorized to receive any appropriation or loan the18
legislature may provide for advancing the purposes of this Act. 19
Section 10. The state of Louisiana shall have no authority over the monies in the20
Plan trust. The state shall have no liability for and does not guarantee the funds or benefits21
of this Plan. 22
Section 11. This Act shall become effective upon signature by the governor or, if not23
signed by the governor, upon expiration of the time for bills to become law without signature24
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If25
vetoed by the governor and subsequently approved by the legislature, this Act shall become26
effective on the day following such approval.27 SB NO. 283
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The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Laura Gail Sullivan.
DIGEST
Brown (SB 283)
Proposed law creates the Louisiana Retirement Savings Plan (Plan), a retirement savings
plan for certain private sector employees, for the purpose of providing portable retirement
and death benefits.
Proposed law provides for legislative findings on the importance of retirement security.
Proposed law provides for a five-member board of trustees with terms of office concurrent
with the governor:
(1)The treasurer, ex officio, or his designee.
(2)One member appointed by the governor from a list of six nominees submitted by the
Louisiana Association of Business and Industry.
(3)One member appointed by the governor from a list of six nominees submitted by the
AFL-CIO.
(4)One member appointed by the speaker of the House of Representatives and one
member appointed by the Senate president from a list of six nominees submitted by
the Louisiana Association of Chamber of Commerce Executives.
Proposed law provides that the board shall select no fewer than three companies to be
providers for the Plan. Specifies that the providers shall manage assets with the objective
of providing a cost-effective stream of retirement income for each participant.
Proposed law requires each private employer in the state that does not offer another
employer-sponsored retirement savings plan to inform employees of the existence and
details of the Plan provided in proposed law. Specifies that the mandate does not apply to
churches or to new or small businesses.
Proposed law provides for employee and employer contributions to the Plan, selection of
Plan providers, termination of participation in the Plan, withdrawal of funds, and
annuitization of benefits.
Proposed law provides that Louisiana is not liable for and does not guarantee the funds or
benefits of the Plan.
Effective upon signature of the governor or lapse of time for gubernatorial action.